Count and accountability

By Rachel Kaylor, on May 3rd, 2012

Under Gov. Rick Scott, Florida has ramped up its efforts to use tax incentives, and in some cases cash subsidies, to lure businesses to the state and boost job growth.
After misses like the Redpine fiasco in Bay County, state officials say they are committed to a more-stringent vetting process to ensure public dollars are going only to worthy projects, and they promise that recipients will be held accountable for their employment projections. Those who don’t deliver must return the money.
That’s good to hear. But the same principle of transparency and accountability must also apply to those doling out the goodies.
A new government watchdog group, Integrity Florida, released a report late last week that accused Enterprise Florida, the state’s public-private economic development agency, of using exemptions in the open-records laws to avoid scrutiny of its dealings. The report criticized Enterprise for not always announcing its board meetings, not always providing agendas and other information online and offering confidentiality to several companies receiving incentives.
The latter charge is a common practice among economic development agencies. Confidentiality is justified when it comes to protecting proprietary information. But too often officials use it as a catch-all to conduct the public’s business in secrecy. The Legislature has scaled back exemptions in the Sunshine Law, but it needs to go further.
Integrity Florida recommends all Enterprise Florida contracts be posted online within 48 hours of their signing. It believes company names and other details could be redacted so the state could maintain its competitive position with other states while at the same time informing the public how much of their money is being spent, how many jobs they expect to get in return and a deadline for results.
Similarly, incentives applications that aren’t approved by Enterprise Florida also should be posted online. Integrity Florida correctly believes that would improve understanding of the Enterprise’s opportunity costs and decision-making processes.
One of the more disturbing revelations in the report is that Enterprise Florida has given out more than $1.5 million in incentives for companies that sit on its board. Those board seats can be purchased for $50,000 each — a relatively minor investment if you can secure a return of hundreds of thousands of dollars in tax breaks or subsidies.
In addition, Ernst & Young, one of the companies that tracks Enterprise Florida’s returns on investment, also has received tax incentives.
Enterprise Florida President Gray Swoope defended the practice, telling the Tampa Bay Times that companies on the board do not get to decide who receives incentives and there “is no quid pro quo.” Nevertheless, it has the strong appearance of insider back scratching and doesn’t bolster public confidence in the agency.
The Legislature has steered more money to Enterprise Florida and given Gov. Scott more discretion in how it is spent. That demands more accountability, not less, particularly given the state’s underwhelming record on getting the most bang for its bucks on this kind of economic development. A recent report by the Pew Center on the States lists Florida as “trailing behind” other states in transparency in these public-private deals.
Officials need to make every dollar count — and be held accountable for every dollar.